Most everyone agrees that our health care system is broken. Prices continue to skyrocket and affordability seems to be a pipe dream for many people. So what, if anything, can be done to help fix it?
The focus of the health care debate has centered around how many people have health insurance. But increasing the number of people who have health insurance can undermine the goal of increasing access.
The best way to improve access is to create a dramatic fall in prices. Adding or forcing more people into the current system will only perpetuate the problem by increasing the demand on a limited supply of health care services that comes from individuals using subsidized and bloated insurance policies.
One of the most straightforward methods of decreasing prices is to increase the supply of care. This would mean increasing competition by taking some of the regulatory chains off of nurse practitioners, physician assistants, dental therapists, etc. Simple care can be provided at a much cheaper rate by these types of providers without reducing the quality and satisfaction of care.
Residency limits are also to blame for the shortage of doctors that is developing. Simplified reciprocity in medical licensing would not only help with these shortages, but also reduce the cost of care via the increased availability of telemedicine.
Another important policy to pursue is health care price transparency. Outpatient care makes up a large part of expenditures, and these type of consumers have the time and ability to consider price options if incentivized to do so. At the end of the day, consumers need to have a reason to save. Simply posting prices at hospitals and doctor’s offices will do little to decrease costs if consumers have no reason to care what the cost is.
This is where programs like Obamacare have gone wrong. As coverage becomes broad, subsidies are given, and insurance companies pay for nearly all of the cost, consumers have almost no reason to even think about costs. Restrictions under Obamacare have caused the prices of high-deductible plans to increase as well as the cost of insurance for young people, moving the industry in the opposite direction of affordability. Instead, we need more high-deductible plans, less coverage mandates, and let everyone have access to a health savings account, or HSA.
HSAs hit directly on the point of helping consumers pay attention to costs. Getting the most out of your HSA dollar will be a key consideration when selecting care. Raising contribution limits and allowing HSA funds to be used for other family members (especially elderly ones) will improve the robustness of this option and increase its attractiveness.
Just as we need the right incentives to drive costs down, we need to eliminate the bad incentives that drive costs up. This means moving away from subsidies and tax credits that allow for ever-rising premiums. By not taxing the value of health benefits, demand for care has increased, while any worry about cost decreases.
We have to allow the market to work by increasing competition with more supply and enabling consumers to be mindful of cost. This will cause prices to fall and, importantly, more people will have access to actually affordable care.
Proposals like expanding Medicaid only perpetuate existing problems. If Utah expands Medicaid under Obamacare, as proposed by Proposition 3 on November’s ballot, Utah will be unable to protect taxpayers when enrollment exceeds estimates — which has happened in every state that has expanded Medicaid — and Utah taxpayers will be forced to foot the very large bill.
The state budget will balloon to the point where services and resources for low-income children, the elderly, and the disabled will become more scarce. By increasing the demand for care, the supply of care will decrease for the very people Medicaid was intended to help.
In short, Medicaid expansion is a faulty Band-Aid applied to a system that needs a serious intervention.
Commonsense solutions are needed that will lead toward a health care market that can work for everyone, rather than pricing out the poor. Ideas to reduce barriers to concierge and telemedicine, direct-pay models, medical cost-sharing and charity care should all be explored in addition to introducing true price transparency and increasing the supply of care.
The wrong incentives have created this mess, and it’s time we paid attention to those incentives to fix our health care system.